At some point in time, there’s a good chance you’re going to want to/need to give money to a loved one. It could be an aging parent who needs help with retirement. It could be an adult child going through a rough patch. No matter what the circumstances, you should make the process of giving money to a loved one as painless as possible. Here are some ways to do that.
Before giving money out, consider all of your options. Maybe the relative doesn’t need money, they just need time. Perhaps you could offer to babysit your adult child’s kids while they pick up an extra shift at work. Or maybe you could start having your parents over for dinner a few times a week to help them save on expenses.
Try to be Objective
As Money notes, it’s hard to be objective when it comes to loved ones, especially when they’re in a time of need. However, before giving money to them, try to eliminate emotions as much as you can. The more emotional you get, the more likely you are to do something you’ll regret.
If you’re making this money a loan, be detailed. Ask the borrower to present a plan on how they’ll pay the money back. You could also come up with a plan together. Be as detailed as possible about the terms of the loan.
It’s important to be honest when lending or giving money to loved ones. That means being honest with yourself — maybe you can’t afford to give out money — and your family members. Explain your financial situation and how it will be impacted by your generosity. Talk about how much you can give (or why you can’t lend them money) and how often. Your loved ones will appreciate the honesty and vulnerability. After all, they’re called “loved ones” for a reason.